The industry must give priority to curbing abusive lending practices that have devastated the housing market and wreaked havoc on the securities market, Federal Reserve Board Governor Randall Krozner said in a keynote speech at last week's ASF 2008 conference held in Vegas.

While the housing crisis has many causes, Kozner said that deceptive lending has proven to be of particular concern. The fallout from the subprime bust has been stark: As of November, roughly 20% of subprime ARMs were 90 or more days delinquent, twice the level of the previous year. More than 171,000 foreclosures were started on these mortgages, up 36% from the previous quarter, Kozner said.

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